ON Semiconductor’s shares plummeted nearly 9% in pre-market trading to $51.76 after mixed Q2 2025 results revealed severe profitability pressures. While revenue edged past expectations at $1.47 billion (versus $1.45 billion forecasts), earnings per share of $0.53 marked a steep drop from $0.78 year-over-year. The gross margin collapse—from 45.3% to 37.6%—and a 70% free cash flow decline to $106.1 million spooked investors. The automotive segment, a key revenue driver, fell 4% quarter-over-quarter despite 23% growth in China’s EV market, with Europe and North America lagging.
AI Data Centers Offer Cautious Optimism
Management anticipates Q3 revenue between $1.465–1.565 billion, but EPS guidance of $0.54–0.64 missed analyst targets, fueling skepticism. Bright spots include a doubling of AI data center revenue and partnerships with industry leaders to develop next-gen power architectures. The firm maintains ambitious 2027 targets: 10–12% annual growth and 53% gross margins, driven by silicon carbide technology. However, the stock’s plunge reflects market doubts about achieving these goals amid current margin erosion.
Ad
ON Semiconductor Stock: Buy or Sell?! New ON Semiconductor Analysis from February 7 delivers the answer:
The latest ON Semiconductor figures speak for themselves: Urgent action needed for ON Semiconductor investors. Is it worth buying or should you sell? Find out what to do now in the current free analysis from February 7.
ON Semiconductor: Buy or sell? Read more here...
